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European Parliament Approves Tougher Maritime Safety Rules

8 May 2009

Mayer Brown Legal Update

Summary

A package of new regulations and directives passed by the European Parliament in March 2009 are expected to improve maritime safety in European waters and better protect coastlines from environmental disasters.

Full Update

The main measures included in the Third Maritime Safety Package, commonly known as the "Erika III" package, are:

Mandatory compliance with international safety standards for ships flying a EU Member State flag

Permanent blacklisting of dangerous ships, and tougher and more frequent inspections

Independent authority to be set up in each Member State with the power to launch rescue operations and decide where to take ships in distress

Stricter insurance requirements for shipowners, and better compensation to passengers in the event of accidents

EU Member State Flags

A new directive has been adopted to improve the quality of European flags. All Member States must effectively verify that international standards are upheld by ships flying their flags. This includes a mandatory audit plan of national maritime administrations and the certification of their quality management systems.

In addition, Member States have agreed to be bound by the main international maritime safety conventions and to apply the International Maritime Organisation ("IMO") Flag State Code. Member States have also declared their commitment to further improve the quality and performance of their maritime administrations, with the objective that all Member States flags be listed on the white list of the Paris Memorandum of Understanding on Port State Control by 2012 at the latest.

Classification Societies

Classification societies employed by Member States to carry out ship inspections will also be subject to a strict set of common rules and standards. Classification societies that fail to meet these standards can be fined and (in more serious cases) their licences withdrawn.

Port State Control

A new directive has been adopted to improve the effectiveness and quality of the visits and inspections carried out by European ports. The current obligation for each Member State to inspect 25% of the ships calling at its ports is replaced by a collective target for Europe as a whole to inspect all ships. These inspections will vary in frequency depending on the risk the ships pose: the most dangerous ships will be inspected every six months, while quality ships will be subject to less frequent inspections.

The new directive also strengthens Europe's ability to ban sub-standard ships - it will be extended to include all types of ships, the ban will be stricter through a minimum ban period and sanctioned by a definitive ban in the event of repeated offences.

Traffic Monitoring

The new directive on Traffic Monitoring establishes detailed rules regarding assistance to ships in distress. This includes defining a clear legal framework on refuge zones, in order to guarantee an independent decision by the authority responsible for the designation of refuge zones and ensuring that the authorities have the necessary elements for decision-making.

Regarding the monitoring of ships in European waters, the new directive aims to guarantee that all Member States will be interconnected via "SafeSeaNet" - a data exchange platform between the national maritime administrations, in order to obtain a complete overview of the movements of dangerous or polluting cargos on ships navigating in European waters.

Accident Investigation

The purpose of the new directive in this area is to improve maritime safety by providing clear EU guidelines for technical investigations and lessons learnt from accidents at sea. IMO rules already require countries affected by an accident at sea to investigate the causes and propose ways of preventing recurrences in the future. The new directive incorporates the following principles underlying the relevant IMO code into EU law:

An EU country should conduct an investigation:

when lessons can be learnt from an accident

when an accident involves a ship flying its flag or occurs in its waters

when its significant interests are affected.

Investigation methods and procedures must be harmonised to achieve comparable quality in all EU countries.

The bodies responsible for investigations must be independent of all parties involved in an accident, including the maritime authorities.

There must be a framework for cooperation between EU and non-EU countries.

An EU database on accidents must be set up.

Compensation to passengers in accidents

The objective of the new rule is to give all passengers travelling in Europe by ship and the carriers themselves a harmonised legal framework setting out their rights and obligations in the event of an accident.

The rule seeks to incorporate into EU law the liability and insurance system under the Athens Convention relating to the Carriage of Passengers and their Luggage by Sea. The new rule supplements the Athens Convention in the following ways:

For damages arising from shipping incidents, victims or their dependents will receive an advance payment, followed by automatic compensation, i.e. they will not need to prove that the carrier was at fault.

For damages arising from accidental injury, victims will have to prove that the carrier was at fault.

Damages will be set by the judge in each case, up to EUR464,000 per passenger.

All carriers must be insured and victims can apply directly to the insurer for compensation.

The new rule will take effect in no more than four years. This means that there will be adequate and equal protection for all European citizens making international journeys in four years at the latest. Protection will also be gradually extended to cover travel within a single journey.

Insurance of shipowners

The new directive requires that all ships flying the flag of a Member State and all ships entering a maritime area under the jurisdiction of a Member State have insurance cover.

The cover must correspond to the ceilings set out in the IMO Convention on Limitation of Liability for Maritime Claims in its 1996 version (LLMC 1996). The proof of insurance will be provided by a commercial insurance certificate. Whether or not the ship is carrying an insurance certificate can be verified during an inspection under the Port State Control directive referred to above. Ships not carrying a certificate may be detained or expelled, irrespective of whether any fines have been imposed by the EU country concerned. The new directive will take effect on 1 January 2012. Shipowners and operators should therefore note to take out additional cover, or risk detention or expulsion upon calling in a EU port.

This new directive is expected to benefit shipowners with adequate liability insurance cover as they will no longer have to face unfair competition from uninsured or under-insured operators.

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